Everything you ever wanted to know about the "Bait and Switch Scam" but didn't know who to ask. The Auto Cheat Sheet will show you how to recognize and avoid this common car dealer scam.
This nasty little scam has to be one of the oldest dealer advertising tricks in the book. It normally takes place during your initial contact with a car dealership on the internet or over the phone.
A dealer advertises a really cheap price or payment and does not have the actual vehicle on the premises. This is called the "BAIT."
When a customer inquires about the advertised vehicle, the car salesman tells them whatever they need too to get them to come into the dealership before they disclose the vehicle is already sold or not in stock.
Once the customer is at the dealership, the salesman will make up whatever excuse to get them interested in a different vehicle. This is known in the business as the "SWITCH."
Definition of the Bait and Switch Scam
The bait and switch advertising scam is used by dealers to lure a customer to the dealership by advertising very low prices or payments on a vehicle in their media advertisements.
When the customer arrives at the dealership, they're told the car has already been sold or is not available at the advertised price. However, the dealer does have several cars similar to the one advertised, at a higher price of course.
How the Bait and Switch Scam Works
A dealer will advertise their most stripped, no frills, cheapest new SUV in the paper at a payment that requires you to put 25% down, with A+++ credit, at a 72 month term.
The ad will show a picture of a fully loaded brand new SUV which is not the same trim level as the payment reflects. In big bold font type, a payment of $225/mo*. All the little extra details like amount down and excellent credit required will be in the small print (disclaimer) hidden in the ad somewhere.
What the dealer is hoping is while you're browsing through the ads, all you focus on is the super low payment on the vehicle you've wanted to buy. This get's you excited, you drop everything and head to the dealership.
Once you're at the dealer, the "bait" (dealer's advertisement) has done its job and got you in the door. Now it's the sales staff's job to complete the "switch" by getting you to spend more money (buy a different car at a much higher price) and give the dealership a chance to make a profit from you. This is a lot easier than you think and can actually happen a few different ways.
1) The vehicle has already been sold.
The first way is once you get to the dealership the salesperson may say something like, "Oh this car, we only had one available and it didn't even have air conditioning, we sold it just before you arrived. However I can show you some similar models that have more options and are very affordable."
This works more often than not. You say to yourself, "I'm already here, might as well take a look." Big mistake you've just fallen for the oldest trick in the book.
2) The advertised car is on the lot and available for sale.
The other way is less aggressive and doesn't give you the feeling you've been victimized by the bait and switch scam. The dealer actually has the "ad-car" on the lot and will show it to you so you can bump yourself off of it onto a higher priced model.
You explain to the salesperson you want the deal in the paper. A smart salesman will ask to see the ad, take the paper from you, and conveniently make it disappear.
He will ask if he can take your paper with him to "check with his manager" to see if the advertised vehicle is still available. When the salesperson returns, your copy of the ad does not. This gets the ad and all the competitors' ads out of your hands.
Car salesmen have been highly trained on how to handle these types of customers. He will start "down-selling" the ad-car immediately. Once you see the ad-car and notice it doesn't have any bells and whistles like power windows, locks, CD, carpet, or even a/c. You'll either start to get a little upset or flexible in your wants and needs.
This is when the salesperson and the dealer's sales-system kicks in. The salesman may say something like, "I know you wanted the deal in the paper but for just a little bit more I can get you into something with a whole lot more features that you'll really like to drive." At this point you'll either want to leave or say to yourself, "what the heck, I'm here anyway." The "switch" is complete.
3) If you want to buy the advertised car.
Most states require car dealers to list a stock number to any vehicle placed in an advertisement. You can take that stock number with you but good luck finding the car. Some dealers have multiple locations only have to list one stock number and the car could be at any one of their locations.
If you do happen to find the ad-car and you want to buy it, make sure you read the fine print in the ad and hold your ground. The dealer will try and talk you out of buying it because they don't want to sell it.
They bought it to specifically use as a loss-leader (stripped) and they won't make any money selling it to you at the advertised price. As long as you meet the requirements, the dealer will probably sell the ad-car to you. A dealer usually keeps a couple loss-leader vehicles on the lot so they can advertise the low prices and payments in their advertisements. The trick is finding them.
As a dealer, I would special order a few stripped cars from the manufacturer just so I could legally advertise super low payments and prices in my print, radio and television advertising. I'd order some of these vehicles without carpet, radio, or even air conditioning.
I'd also make sure I ordered the ugliest colors I could get, hopefully keeping the vehicle on my lot for a while and not selling it right away.
Having a couple "no-frills" cars on the lot would get the customers to roll in on the low advertised prices and I'd leave it to my salespeople to switch them to a higher priced car.
How to Avoid the Bait and Switch Scam
- Dealers are very creative when pricing vehicles in their ads. Always look for the disclaimer and read the fine print in a dealer's ad. Look for the asterisk or symbol beside a payment in the advertisement. If there's a symbol, look for the fine print and match the symbol to the special requirements for that payment.
- Avoid dealer advertising altogether. Competition between dealers will always get you the best price. Use the Internet to get competitive new car price quotes online.
- Driving to a dealership located in a big city just because you saw a super low price in an ad is a big mistake. All dealerships buy their vehicles from the manufacturers at the same cost.
- Familiarize yourself with deceptive car dealership advertising terms here.
- Don't talk to several salespeople at the same time. Dealers may use this technique, overloading you with information, to confuse you into buying a car without making a good car buying decisions.
- Do your homework first before contacting a car dealership. Decide on the vehicle you want to buy and figure the dealer's true new car cost before making them an offer.
- Don't visit a car dealership alone. Take a close friend or family member with you. Fast talking salespeople are very talented in manipulating you into buying something you don't want or worse yet, can't afford.
The best way to protect yourself against a scam is being able to recognize it before they happen. Read about more car dealer scams committed in dealerships nationwide.
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